A health insurance plan is like an emergency loan. You may not get one when you really need it. How?
The reason people start looking for health insurance once they suffer a disease is that they now feel they are likely to need hospitalization. The issue is the insurance companies too know this, and hence are reluctant to offer insurance, especially at the standard prices.
The process of approval an insurer follows when approving your health insurance application is very similar to how you would behave when you are buying a house that's up for resale. Your buying process will include examining everything in minute detail - the size of the apartment, the condition of the roof, the walls and tiles, whether the fittings are working properly, society amenities, the legality of the property papers, and so on. Depending on the condition of the house, and the expenses you will have to bear once you buy it, you will decide whether to buy the house or not and at what price.
Similarly, when you buy a health insurance plan, the insurer undertakes the responsibility of covering your healthcare expenses for a lifetime. They have to pay for all your hospitalization expenses as per the policy document. They, hence, do a detailed evaluation of you, your health, medical history, and how you’re taking care of yourself.
If you have any medical condition or any other history that gives a signal to the insurer that you may be at higher risk of hospitalization than their average young and healthy customer, this can significantly affect the acceptance of your health insurance plan by the insurance company.
To make the most of your health insurance plan, try to buy it as soon as possible - when you’re healthy, fit, and young. The buying process will be seamless and the premiums lower.
In this article, we will discuss why you should buy a health insurance plan before you get a disease. Let’s have a look!
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5 Reasons Why You Should Buy Health Insurance Before You Get A Disease
If you have a pre-existing disease, the insurance company may -
A loading charge is basically an extra amount that is added to your premium if the insurance company finds covering you riskier than the average young healthy individual for whom they priced the health insurance. And so, you will need to pay higher premiums than normal to buy a health insurance plan.
Loading charges vary across insurers - some may charge a loading of 10% whereas some may even charge 50% on your premiums. You need to pay this loading every year, even if your health has improved later.
If you buy the plan before contracting a disease, you can save a lot of money, because the premiums will obviously be lower.
A waiting period is a predefined span during which illnesses aren’t covered by your health insurance plan. As per IRDAI definition, only illnesses which have been diagnosed or treated 48 months before the date of applying for the policy, are considered under the waiting period. The waiting period for pre-existing diseases can range across insurers from 1 to 4 years.
If you are hospitalised because of a pre-existing disease or a medical condition that can be traced back to it during the waiting period, you will need to pay the costs of the same from your pocket. Your health plan will not pay for the treatment.
For instance, Amey was diagnosed with diabetes in 2021 and he purchased a health insurance plan immediately, thinking that it would cover the treatment costs. However, his insurance plan stated that pre-existing diseases would be covered only after a 3-year waiting period and so, his coverage for diabetes treatment will begin in 2024. Any treatment costs up to then will have to be borne by him.
Impose Permanent Exclusions
The IRDAI has now allowed insurers to permanently exclude certain listed existing diseases from your health plan coverage if they have a major effect on your health for an extended period of time. These include diseases such as stroke, cancer, epilepsy, liver disease, kidney disease, and so on. This implies that you can claim for all other illnesses except the one excluded by the insurance company.
Hence, buying a plan before you get a disease will ensure that you have holistic health coverage.
Insurers can also apply restrictions on your health plan. For instance, they may add a copay for the pre-existing disease, resulting in you having to pay a certain percentage of the treatment costs.
Note: Copay is a specific percentage of the approved claim amount that you’ll have to pay yourself. For example, Sachin has a health insurance plan with a sum insured of Rs 20 Lakhs with a copay clause of 10%. He undergoes hospitalisation for pancreatic surgery which costs Rs 5 Lakhs. So, he will be responsible for paying 10% of the amount, i.e., Rs 50,000. The insurance company will pay the remaining amount of Rs 4.5 Lakhs.
So, if you buy a health plan when you’re healthy, you won’t have to bear any extra costs or restrictions.
Reject Your Application
This is the worst-case scenario, but not uncommon. The insurer may also reject your policy application if they feel your health and lifestyle profile is too risky to offer their coverage. For instance, given our experience, we have found that insurers will reject young customers with Diabetes, compared to old customers with Diabetes. The reason is younger customers with Diabetes reflect hereditary or lifestyle issues, as compared to some who have been diagnosed with Diabetes at say 50, because of ageing.
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We hope this article helped you understand why buying a plan at the right time - when you are fit and healthy - is of utmost importance. Not doing so will result in you being between a rock and a hard place, with a disease and a health insurance plan with complicated caveats.